Late Payment Penalty

Companies have one month from the date of the Notice of Assessment (NOA) to pay their tax. 

A company is required to pay the tax as shown in the NOA even if it has filed an objection and is awaiting the outcome. If the assessment is subsequently revised, any excess payment would be refunded to the company.

If payment is not received by the due date, a 5% penalty and subsequently an additional 1% penalty will be imposed for every completed month (up to a maximum of 12% of the tax outstanding).

Late Payment Penalty Letter

Companies will be informed of the 5% penalty via a late payment penalty letter. Payment must be made by the due date stated on the letter to avoid further enforcement actions.

GIRO Cancellation or Termination

If the deduction through GIRO is unsuccessful due to reasons such as insufficient funds in the bank account, or the deduction amount is higher than the limit set, etc., IRAS will cancel the GIRO plan.

A late payment penalty letter and a GIRO cancellation letter will be issued to inform companies that the GIRO plan has been cancelled.

Imposition of Additional Penalty

Additional penalties of 1% per month may be imposed if the tax remains unpaid 60 days after the imposition of the 5% penalty. The 1% penalty will be imposed for each completed month that the tax remains unpaid, up to a maximum of 12% of the tax outstanding (inclusive of the 5% late payment penalty).  

Further Enforcement Actions

If the tax continues to be unpaid, other actions to recover the taxes may include:  

  • Appointing agents like the company’s bank, tenant or lawyer to pay the moneys to IRAS; and/or

  • Taking legal action.

In addition to the recovery actions, IRAS may concurrently impose an additional 1% penalty on the overdue tax for each month that the tax remains unpaid.

Releasing Appointed Agents

Agents will only be released from the appointment after the tax and penalties have been paid, or when payment has been arranged with IRAS.  

Note:
For banks appointed as agents, requests for release cannot be processed on Saturdays, Sundays and Public Holidays. Any request for release of bank after 2pm on weekdays can only be processed on the next working day.

Checking Tax Balance and Making Payment

Please log in to myTax Portal and select "View Account Summary" to check the current balance. 

Please refer to Corporate Tax Payments for the various payment modes available.

Appeal for Late Payment Penalty Waiver

Appeals have to be made online via myTax Portal or using this form Request for Penalty Waiver. Alternatively, please scan the QR code below. The appeal will only be considered if the following conditions are met:

  1. You have paid the overdue tax in full, by the due date as stated in the late payment penalty letter; and
  2. a. This is your first appeal; or
    b. You have filed and paid on time for the past two years.

    Request for Penalty Waiver QR Code

  • How is the 5% and 1% additional late payment penalty computed?

    Example 1: Calculation of 5% late payment penalty

    Company Y received a Notice of Assessment (NOA) dated 18 Oct 2017. The due date for the tax payable of $10,000 is 18 Nov 2017 (one month from the date of NOA).  As Company Y did not pay the tax by 18 Nov 2017, a 5% penalty of $500 (i.e. 5% x $10,000) was imposed.

    Date of NOACorporate Income Tax Due DateTax Payable 5% Penalty Imposed 
    18 Oct 201718 Nov 2017$10,000$500

      

    Example 2: 1% additional penalty

    Company Z did not pay the tax payable of $10,000 by the due date on the NOA, and received a late payment penalty letter dated 8 Jun 2017 informing the company of the overdue tax and the 5% late penalty. The due date for payment of tax and penalty (i.e. $10,500) on the letter was 8 Jul 2017 (one month from the date of the late payment penalty letter). Company Z eventually paid the tax and penalties on 15 Sep 2017.

    The payment was overdue by more than two months after the late payment penalty letter due date i.e. Aug and Sep. The total penalty imposed was $700 (i.e. 5% penalty x $10,000 plus 1% additional penalty x $10,000 x 2 months).

    Late Payment Penalty Letter Due DatePayment Date 5% Penalty Imposed Additional 1% Penalty Imposed
    8 Jul 201715 Sept 2017

    $500

    ($10,000 x 5%)

    $200

    ($10,000 x 1% x 2 months) 

     

  • I have appointed a tax agent. Who is responsible for my company’s tax matters?

    As the owner of the company, you are still responsible and liable for filing and payment issues, even if your agent fails to settle the filing and payment issues promptly.

  • Why is my company penalised for not paying the tax when I have objected to the tax?

    The tax is still payable pending the outcome of your objection to the tax assessed. If the assessment is subsequently amended, any excess tax paid will be refunded to the company.  

    Example: Penalties and Refunds when an Objection is Filed

    Company X received an estimated NOA, with a tax payable of $10,000, dated 23 Aug 2017. The due date for payment 23 Sep 2017 (one month from the date of NOA).

    The company filed an objection and did not pay the tax. As no payment was received by the due date, a 5% late payment penalty of $500 was imposed.

    The company paid the tax and penalty on 12 Oct 2017. On 9 Nov 2017, the Assessment was amended to $1,300 and the late payment penalty was revised to $65 (5% penalty on $1,300) accordingly. A refund of $9,135 was made to the company.

    Date of NOA Due Date on NOADate of PaymentTax Amount 5% Penalty Imposed
    23 Aug 201723 Sep 201712 Oct 2017$10,000$500
    9 Nov 201723 Sep 2017 -($8,700)($435)
    Revised Tax and 5% Penalty  $1,300$65

     

     

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